(1 year, 10 months ago)
Commons ChamberI suppose that it is apposite that there is an urgent question on a potential recession on the third anniversary of Brexit.
The IMF has said that the economy of the UK—the only G7 country facing recession—would face a downgrade reflecting, it says, tighter fiscal and monetary policies and the still high energy retail prices weighing on household budgets. There is no getting away from it: with even sanctioned Russia forecast to grow, that is a gloomy prognosis. Given that the Government expect to meet their own new fiscal rule on public sector net debt by a paltry £9 billion in 2027-28, according to the Office for Budget Responsibility, the Government’s own strictures mean that there is no fiscal headroom to provide more support. Is this not the time, therefore, to reduce the energy companies’ investment allowance, which allows them to reduce the tax that they pay by 91p in the pound, to start to generate a meaningful windfall tax that is required to further support households and small and medium-sized enterprises—two of the main drivers of the IMF forecast for the economy—which will otherwise see their energy costs rocket this year?
The right hon. Gentleman talks about tight fiscal monetary policy. We are faced with inflation; it is higher in the UK than in 14 countries in the EU. Inflation is a global challenge, so he is right: we do need to have that stance. Obviously, we want to get inflation down. The cost of energy bills is precisely why, this winter, a typical household in the United Kingdom will have received £1,300 of support, £1,400 in cost of living payments, and the energy price guarantee, estimated by the OBR to be worth £900 for the typical household. That support is provided to every single part of the United Kingdom.
The right hon. Gentleman’s specific suggestion—to be fair, he is making a specific fiscal proposal in relation to the allowance—will hurt one particular sector: the North sea and investment in UK energy. Does he know what the long-term answer to this is? It is not supporting families—we are doing that very generously at the moment—but energy security, investing in nuclear and in the North sea as part of our transition to net zero.
(1 year, 11 months ago)
Commons ChamberI call the Scottish National party spokesman.
Happy new year, Mr Deputy Speaker.
I thank the Minister for his statement and for early sight of it, although I suspect businesses will be as underwhelmed and disappointed by it as they were frustrated by the delay in making it. I am disappointed that the higher level of discount will be removed after March this year, which is less than three months away; it does not give businesses the time or opportunity to plan.
There is also a degree of sleight of hand. I do not think the public will buy the £5.5 billion budgeted between March 2023 and March 2024 being portrayed as a year’s worth of support given that, as the Minister said, the cost of the package for six months to March this year came in at £18 billion. To dress that up as fiscal prudence simply will not wash.
The key thing is that the Minister said that no Government anywhere in the world can permanently shield business from the energy price shock—that mirrors what the Chancellor said a few days ago—and he went on to say that levels of support were time limited and intended as a bridge to allow businesses to acclimatise. May we have an assurance, however, that if this turns out to be not a short-term price shock but a medium-term price problem, this package and the level of the discount will be reviewed before next winter so that we do not have businesses that manage to survive this year falling over next December, January or February because they cannot afford to heat or light or power their workshops?
(2 years ago)
Commons ChamberSubsequent to the changes to the insurance market to protect people from the loyalty payment, the Chancellor announced his Edinburgh reforms to wider financial services regulation and a great many consultations. At a quick glance, many of them closed very quickly—on 5 February, 17 February, 3 March, 5 March and 17 March. Given that the Treasury Select Committee warned over a decade ago that the Government
“needs to take the time required to get its reform of financial regulation right”,
how can we be convinced that the rather painful lessons of the financial crash have not been forgotten?
For four and a half years, I was the Economic Secretary to the Treasury, and many of those reforms were baked up over a lot of consultation with industry over many months. The Edinburgh reforms represent an incremental advance on those reforms and have high prudential regulatory standards very much at their core.
I will come to that, because the Minister is absolutely right. I did quote from a 2010 report. But in June this year, the Treasury Committee, in its report on the future of financial services regulation, warned:
“Weakening standards could reduce the financial resilience of the UK’s financial system and undermine international confidence in that system and the firms within it.”
Given the intention to review capital requirements, and the new remit letters and secondary objectives for the Prudential Regulation Authority and the FCA, how will the Chancellor and the Minister ensure the regulatory focus on stability is maintained?
I gave evidence to that inquiry and I heartily agree with its conclusions. Stability is at the core of the regulators’ objectives, but so is the need to look at the competitive landscape across the globe and ensure that the UK, with the city of London as a global hub for financial services, evolves and remains competitive, taking account of the risks but also developing frameworks in line with expectations, so that we can remain that world-leading global hub.
(2 years ago)
Commons ChamberI am grateful to the Father of the House for his question—I do not think that I will ever get another that mentions both elasticity and high-strength cider; it was an interesting combination of points. He made a very good point about wine. I have enjoyed engaging with all the main alcohol sectors, mainly in November, in the run-up to the making of this decision. As he knows, we are requiring all wine between 11.5% and 14.5% ABV to be treated as though it were 12.5% ABV for the purpose of calculating the duty rate. That will apply for 18 months, so there is a transition. We have to ask ourselves: if that were made permanent, would it not undermine a regime that is ultimately based on taxation by strength? I understand my hon. Friend’s point and will continue to engage with the sector on it.
I welcome the statement. I have long supported an alcohol content duty regime, and I hope that it delivers the fairness that the sector needs. As a gentle aside, may I say that we did not need Brexit to bring in this regime? The UK could have applied for a derogation, but it chose, over decades, not to do that.
I have some technical questions. The previous Chancellor, the right hon. Member for Spelthorne (Kwasi Kwarteng), announced a one-year freeze on alcohol duty in “The Growth Plan 2022”; that was due to cost £545 million in 2023-24. The current Chancellor scrapped that, but anticipates an additional yield of £1.3 billion in 2023-24; that was in the autumn statement 2022. First, how can a one-year freeze cost £500 million, while its cancellation in the same year suddenly generates £1.3 billion of additional yield? Also, we have been told that the freeze is being reintroduced and will last until August. How much will that cost the Exchequer?
The proposals following the post-2021 Budget consultation have been reported as having a modest cost of only £25 million next year—that was in the autumn statement Green Book. But this statement seems to suggest that the cost to the Exchequer of the draught beer relief scheme alone will be £100 million a year. Will the Minister explain what the net cost of this measure will be either to the Exchequer, or to the industry? As things stand, the numbers are not clear and in some cases do not add up.
I am glad that the right hon. Gentleman supports the principle of the reform package that will come into place next August. I hope Members across the House can do so. The cost obviously depends on what decision is made in the Budget next year. That is a matter for the Chancellor at the time. We know that that will be on 15 March, so there is not too long to wait.
The right hon. Gentleman made the point that it was not necessary to leave the European Union to make these changes. To be clear, EU law does not allow member states to differentiate beverages on qualitative characteristics such as whether the product is on draught. EU law actively discourages any attempt to support the on-trade through the duty system. That is also true for a system based on ABV; by and large, that would have been very difficult as well. The fact is that this is a radical reform and it has been made possible by Brexit.
(2 years, 1 month ago)
Commons ChamberOn what has just been said, the issues relating to the power of direction in clause 4 and the steer that can be given on the strategic priorities by the Treasury deserve to be explored in a little more detail. When I see words like
“the Government will not normally”
and I think about what the Government do not normally do in relation to Scotland, I think the hon. Member for North East Bedfordshire (Richard Fuller) is right to be slightly anxious.
However, I give the UK Infrastructure Bank and the Bill a broad welcome. Taking the Bill at face value, there is nothing to criticise in its objectives of helping to tackle climate change and supporting the efforts to meet the UK Government’s 2050 targets. Nor is there anything to criticise in the objective to support regional and local economic growth. What I would point out, however, is that—the Minister alluded to this—the delivery of support to facilitate local and regional growth is provided in Scotland by the Scottish Government, local government and other agencies, and that the green targets in Scotland, for example the earlier net zero target, are also set independently in Scotland. It is therefore important that the UKIB supports the devolved Governments’ objectives and does not, even inadvertently, end up working against them. That is important, because Scotland has its own infrastructure investment plan, our own global capital investment plan and our own national strategy for economic transformation that provides the framework for the Scottish Government’s policy priorities.
There is—I am sure the Minister is aware of this—clearly an overlap between the strategic objectives of the UK Infrastructure Bank and the Scottish National Investment Bank, particularly in the context of tackling climate change and supporting regional economic growth. The UKIB’s aims include:
“to help tackle climate change”
and
“to support regional and local economic growth”.
The Scottish National Investment Bank’s aims include:
“investing in inclusive and sustainable economic growth”
and
“investing to promote environmental wellbeing”.
To ensure that both banks meet their goals and deliver the maximum impact for the people of Scotland, and in line with the objectives being set in the Bill, it is essential that the two banks are able to work together to identify and support appropriate infrastructure projects in Scotland. It is also vital that Scottish interests are appropriately represented and that there is an awareness of the Scottish economic context and the Scottish Government’s policy goals. To ensure that there is alignment between both of the bank’s aims, there should be an administrative mechanism, such as a memorandum of understanding, between the UK Infrastructure Bank and the Scottish National Investment Bank to ensure that policy alignment is maintained. I fear that, unless we have such a mechanism, UKIB’s aims might be undermined and there will ultimately be a risk that it will not deliver fully on its objectives.
It is also vital that the creation of UKIB is not seen as an excuse to reduce further the Scottish or any other departmental or devolved Administration budget. We have already had a £1.7 billion real-terms cut since last December. However, I welcome the Bill and its strategic objectives, including tackling climate change, but it is vital that the Scottish Government’s more ambitious climate targets are reflected either in the Bill or in the way in which the bank operates.
My next point is on the bank’s activities, which are clearly described in clause 2 as
“providing financial assistance to projects wholly or mainly relating to infrastructure”
and
“providing loans to relevant public authorities”—
and so on. That is broadly welcome, as is the description of infrastructure underpinning the “circular economy”—not least because the Scottish Government are introducing a circular economy Bill to advance a zero-waste and circular economy by increasing reuse and recycling rates and improving waste and recycling services. It is important that the investment bank can therefore fund existing bodies such as non-governmental organisations, think tanks and other agencies that are already specialists in their fields. Let us take, for example, the Scottish Institute for Remanufacturing at the University of Strathclyde, which enables industry to become part of the circular economy. To date, the Scottish Institute for Remanufacturing has committed substantial sums to support Scottish remanufacturing to become part of the circular economy.
I also particularly welcome the express inclusion of railways, including rolling stock, in the description of infrastructure. However—this is a very narrow point—I was at a loss as to why there was no specific reference to electrified rail or carbon-neutral rolling stock. That may be implicit in the Bill’s intentions, but it would nevertheless have been helpful to see it.
On strategic priorities and plans, the Bill states:
“The Treasury must prepare a statement of strategic priorities…The Treasury must comply with subsection (1)…The Treasury may revise or replace the statement…The Treasury must lay a copy…before Parliament…The Bank must…act in accordance with strategic plans which reflect the Treasury’s statement”.
I can well understand why the Treasury would be intimately involved in the creation and the nuts and bolts of setting up a bank, but I am at a bit of a loss as to why devolved Administrations, other agencies, the Department for Business, Energy and Industrial Strategy, the Department for Environment, Food and Rural Affairs and even those responsible for levelling up have no specified role in setting out the bank’s strategic priorities.
My final point is that, sadly, as has been mentioned, we have been here before with the Green investment bank. The Minister said twice in his opening remarks that he wanted the bank to be long-lasting and to endure, and I agree entirely. However, the way in which the Bill is drafted fails to provide the certainty that many of us would like about its future. The Treasury has too much power over the investment bank’s functions and there are few safeguards to ensure that the bank is not sold off to a private company. It is vital that the Bill contains more of an assurance that UKIB will not meet the same fate as the green investment bank: it was privatised and is now owned by the Macquarie Group. The Green Investment Group, as it is now known, carries out extremely valuable work, but it is vital that the new investment bank is not set up at public expense and public risk only to be sold off later. I am sure that right hon. and hon. Members will recall that when it became clear that the old green investment bank was to be privatised, the decision was described as reckless. This is what was said at the time:
“The Green Investment Bank is not just the government’s most lauded innovation in the war against climate change. It has kept investment in the real economy going at a time when bank lending had fallen to an all-time low. It has played a critical role in supporting the UK economic recovery.”
I would like the UK Investment Bank to be long-lasting and to endure. The last thing we would like to see is the public purse and public risk being used to establish an institution that is then privatised, no doubt with some Minister hoping for preference later and a seat on the board. That is not what our party considers the circular economy.
(2 years, 2 months ago)
Commons ChamberThe answer is yes. To demonstrate that I understand what my hon. Friend is talking about when he talks about the private sector, I am going to say some words I have always dreamed of saying from this Dispatch Box: I used to be an entrepreneur.
The Chancellor spoke about difficult questions to be faced in the future, and I hope he is not going to fall into the old trap of trying to cut his way to growth, because that cannot work and it never works. May I welcome what he did today: the screeching U-turn on the vast majority of the mini-Budget from the Prime Minister and his predecessor? Given that he has done that—I do welcome it—may we have a guarantee from him today that for as long as he has anything to do with it, there will never be a return to extremist, crank, experimental, think-tank economics?
I am happy to offer that guarantee if the right hon. Gentleman will agree to explicitly reject the extremist, crank, think-tank economics of Scottish independence.
(2 years, 5 months ago)
Commons ChamberIn April the UK had a national net debt of £2.4 trillion—that is 12 zeros. The Chief Secretary was brave when he spoke about fiscal responsibility. The motion starts by noting that
“UK economic growth is forecast to grind to a halt next year, with only Russia worse in the OECD”.
That would be bad enough, but when one actually analyses what the OECD says, the position is even more stark. It says:
“GDP is projected to increase…in 2022, before stagnating in 2023. Inflation will keep rising and peak at over 10% at the end of 2022 due to continuing labour and supply shortages and high energy prices. Private consumption is expected to slow as rising prices erode households’ income. Public investment will weaken in 2022 as supply bottlenecks hamper...investment”.
It is a gloomy prognosis.
The IMF’s numbers make for troubling reading. The 1.2% growth forecast for the UK next year is the lowest of the advanced economies. That growth is also lower than emerging and developing Asian economies; lower than Latin America and the Caribbean economies; lower than the middle eastern and central Asian economies; and lower than sub-Saharan Africa. All of that at a time when, as the motion says,
“food prices, petrol costs and bills in general are soaring”.
Given that inflation in the euro area was at 8.1% in May, one could make a credible case that this is a global phenomenon. However, some of the problems are self-evidently self-inflicted. Only a fool would deny that many of the continuing labour and supply shortages are a direct result of the self-inflicted economic harm that is Brexit, leaving the single market and ending the free movement of labour. I know that the Minister said that Brexit is done and we need to move on, but I am not sure that there is a way to resolve many of those issues without addressing the freedom of movement and the single market issues.
Who pays the price of the failures? The OECD rather helpfully tells us:
“Vulnerable social groups have been particularly affected by the pandemic and poverty is set to increase as jobs are lost and self-employed see incomes dwindle”.
It will not be the Tory donors and cronies who benefited from the dodgy personal protective equipment contracts who will suffer. It will not be the bankers whose bonuses are proposed to be uncapped. They will not suffer, but then these people never do.
When the OECD talks about poverty being set to increase, we must also remember that this is not all by chance. It is not all a result of covid. It is not all because of external inflationary pressures. It is not all other people’s fault. It is a result of removing the universal credit uplift. It is a result of increasing national insurance. It is a consequence of the Tory policy of taxing the country more than it has been taxed for the past 70 years.
However, the motion before us also recognises that this failing and out-of-touch Government are leaving the UK with backlogs, such as the long waits for passports, driving licences, GP and hospital appointments, court dates and at airports. These things are all happening; we are seeing them with our own eyes. Many of these problems are of the Government’s own making, and their failure to understand, let alone tackle them is, I think, to their shame.
Let us look at the passport fiasco. Three weeks ago, I went to the pop-up passport office in Parliament with 24 cases. I went again last week with a further nine. Those are not unusual numbers; every MP has this. The staff there are incredibly helpful, but it is clear that the entire system is broken. Staff are drowning in the backlog of work. This is about not only families desperate not to lose hard-earned cash through cancelled holidays because they do not get their passports in time, but the impact that this is having on business. A local businessman told me recently:
“I travel abroad regularly for business and was unable to send off my passport for what could be 10 to 12 weeks. I was planning to use the fast-track service or online premium as my passport runs out in September. In the last six weeks, there has been no availability from Glasgow and I was planning to travel to Belfast or Durham, which were the only passport centres available.”
He told me a couple of weeks ago that
“as of last week, the passport website has been down with no access or availability. My current passport runs out on 11 September. I have business trips booked through May and June and, while I believe you can travel with up to three months on a passport, there is no guarantee that the airlines will allow you to fly.”
What sort of Government allow their Departments and agencies to fail like this, effectively stopping businesspeople travelling overseas to win new orders or to source raw materials or equipment?
And on an associated point—this is another Government failure—I have a local business that had advertised a professional management role. It told me that it did not receive a single eligible candidate from the UK in five months. It did, however, find a very good candidate in the United States and applied for a sponsor licence under the skilled worker immigration route, only to be denied on the grounds that they had not, apparently, provided all of the required information, while at the same time receiving no request for any additional information. This is Kafkaesque bureaucracy. It is a system that is designed to fail. The problem is, though, it was not just one person who did not get a job. The failure to bring this managerial role person on board has resulted in the business postponing the recruitment of other managerial and supervisory positions. What sort of Government would deny businesses and therefore the economy the opportunity to grow because they cannot issue a visa to someone who is self-evidently qualified to receive it?
Of course, the failures and backlogs are not all in passports and visas. I want to turn briefly to another constituent and the DVLA. This alludes to something that the shadow Chief Secretary to the Treasury said. A constituent who wrote to me yesterday said:
“I voluntarily surrendered my licence in June 2020 due to ill health, I have since reapplied...after I was advised that I should reapply for my licence. Since then, 19 weeks have passed and I have only heard from the DVLA to advise they had all the information required, this was on the 16th May when I made contact with them. I have enquired a few times since... I have contacted them via a special e-mail address that is set up for front line workers as this is meant to be a faster process.”
God help the poor souls who do not have access to the faster process. He went on:
“I am currently working as a community mental health nurse...my team works with severe and enduring mental health and requires a lot of travel for home visits, some of which are emergency situations. As you would expect this is having a massive impact on the service that I as a community mental health nurse can provide due to not being able to drive.”
This is not just backlog Britain; this is broken Britain. It is businessmen who cannot travel, businesses unable to recruit and mental health nurses unable to visit their patients.
Instead of the underlying problems being fixed—I am not talking about the short-term mitigation—what do we have? Threats of privatisation. At its heart, that is what this is all about: more private profit from the public purse going to the same people and, as I am sure none of us would be in any doubt, a yet more expensive and even poorer service for the people who depend on all these agencies.
(2 years, 9 months ago)
Commons ChamberThe hon. Member makes an important point. I will come on to the ways in which we are ensuring that those who need to access a physical location are indeed able to do so.
According to UK Finance, as of 2019, half of adults in this country used mobile banking. In the 12 months to February 2020, half of adults with a day-to-day bank account carried out their banking activities face to face in-branch, down from almost two thirds— 63%—just three years earlier. The Government want to ensure that people have appropriate access to banking services, and the transition towards digital banking brings many opportunities for individuals and businesses. It is our view that the Government cannot and should not seek to reverse the changes we are seeing in the market and in customer behaviour. Nor should the Government determine firms’ commercial strategies in response to these changes. Having the flexibility to respond to changes in the market is part of what made the UK’s financial services sector one of the most competitive in the world, and the Government want to protect that success.
While Governments should not be setting commercial objectives for the banks, I was told by a representative of a bank which had shut both a branch and removed the automated teller machine that it cost as much to keep an ATM as to run a branch, so I think we need to say to the banks—while not imposing any commercial criteria on them—that they should at least be honest about the reasons why branches are shutting.
I am confident that banks will be carefully looking at how much it costs to run an ATM versus a people-staffed bank and will make those decisions accordingly, but we recognise the impact of branch closures on people and their communities, and the hon. Member for East Renfrewshire (Kirsten Oswald) talked about the importance of engagement with communities. Since 2017, the UK’s largest banks and building societies have been signed up to the access to banking standard, which commits them to ensuring that they inform customers about any branch closures, that they explain the reasons for the closure, and that they clearly outline customers’ options for continued access to banking services.
(2 years, 9 months ago)
Commons ChamberYes, absolutely. The reason why we are in the current situation is that the Government have not planned ahead. They have chosen to sit on their seat when they should have been looking to where we could go in future. I hope the Minister will address that point when he sums up the debate.
As my hon. Friend knows, when the price of oil goes up, the tax yield to the UK Exchequer is increased; when the price of a gallon of petrol goes up, there is extra duty for the UK Exchequer; and when the price of domestic bills goes up across the board, there is additional VAT for the UK Exchequer. Does he not find it passing strange that Tory Back Benchers are not calling for the additional tax yield that the UK Government already have to be used to reduce the cost of domestic bills?
Absolutely. As I understand it, the Treasury currently believes it is going to take in excess of £3 billion in relation to oil and gas in particular. Every single pound and penny of that £3 billion should be directed towards the provision of support for families up and down the country.
It is on that support that I wish to briefly reflect. We know the Government have gone nowhere near far enough in terms of their support for households up and down the country. What can they do? What should they be doing? We know that they should be scrapping VAT on energy bills. We know that they should be reversing the national insurance price hike—a tax that will impact not just households, but businesses, too. We know that they need to turn those loans that they have forced on people into grants, and we know that they need to overturn that £20 cut to those on universal credit. People need help, and they need help now. The Chancellor cannot continue to stand still as if nothing at all is happening.
When we discuss these things, the Conservatives often say, “Well, what are you doing? What are the Scottish Government doing?” Without getting into the technicalities of who has powers over law and where resources lie, because, of course, we know that those are the responsibility of the UK Government, it is worthwhile reflecting on what we in Scotland are doing differently to what this UK Government are doing.
We are, of course, in the middle of a fuel crisis, but an older or younger person living in Scotland can hop on the bus for free. A person in Scotland who is struggling with their health can rest assured that they will continue to get free prescriptions. A family worried about how they will feed their wee bairn will know that there are funded hours in nurseries where they will be fed, and that when they go to primary school, they will receive free school meals. With the limited welfare powers that the Scottish Parliament has, the Scottish Government not only introduced the game-changing £10 Scottish child payment, but are doubling it in a matter of weeks to £20 a week. Those are huge differences in policy objectives and intentions, and they are designed to assist people. Yet, at the very same time, we still have the dead hand of Westminster above us, forcing us to spend some £600 million each and every year just to mitigate its policies, such as the bedroom tax. We can and should be able to do so much more, but we are held back by this UK Government and their complete intransigence.
Another question that this Government rightly ask is: “You have quite a wish list there, how do you fund it?” That question is justifiable, which is why we have come forward today not just with problems—problems that we are all aware of irrespective of party—but with solutions, too. Is it right that Serco, Amazon, Netflix and Asos are able to benefit from the pandemic to the tune of billions of pounds because of the way that people’s habits have changed and because of the contracts that they have received from the Government while our constituents are struggling? Absolutely not; it is not right at all. That is why we are calling for a broad windfall tax—one that takes into account the changing landscape in the UK and globally so that we can respond to it to provide people with the support that they so badly need, and which is so badly overdue.
I accept—I think everyone in this Chamber accepts—that, ultimately, such a mechanism is for today; it is not necessarily for tomorrow. What do we do next year? What do we do the year after that? That takes me back to the point that the right hon. Member for Wokingham (John Redwood) stumbled into earlier in relation to renewables. We are very much in this mess not just because of Brexit, not just because of the pandemic, but because of the energy policies, over decades, of this UK Government. What they need to do is come forward with a clear and concise plan as to how they intend to turbocharge renewables: hydrogen; hydro pump energy storage; onshore wind; offshore wind; solar; and tidal. Scotland has the resources. Scotland has the ability to deliver that energy security not just for people living in Scotland, not just for people living in the rest of the UK, but for our friends and allies in Europe who need that energy security now more than ever. We need the Government to come forward with that plan and to do so now.
Finally, as I said earlier, food prices and fuel prices are soaring. When will the UK Chancellor finally set down his silver spoon, pick up his cheque book, and deliver the support and security that people so badly need?
I just mentioned the importance of rebuilding the public finances. We know that the NHS is the No. 1 priority for the general public; it is vital that we reduce the backlogs that sadly built up during the pandemic, and that needs to be paid for.
To come back to the motion, last month we announced an additional package of support to help households with rising energy bills, worth £9.1 billion—a package that, according to the motion, the Scottish National party wants to scrap. Our package to help people includes a £200 reduction in household energy bills this autumn that will be paid back automatically over the next five years, and a £150 non-repayable council tax rebate payment for all households in council tax bands A to D in England, plus £144 million of discretionary funding for local authorities in England to support households who need support but are not eligible for that council tax rebate. As we cannot apply these council tax measures across the whole of the UK, the devolved Administrations are receiving almost £600 million through the Barnett formula. This overall approach is fiscally responsible while helping customers to manage the unprecedented increase in energy bills and helping to spread the increased cost of global prices over time.
The Minister mentioned global prices and I was rather struck that she sounded like Gordon Brown saying that it was always someone else’s fault. It is absolutely true to say that there are global pressures causing inflation, but while some countries are capping their electricity price increases at 5%, we are allowing 50%-plus increases in domestic energy prices. For all the big numbers that she has read out, does she not understand that people cannot afford to heat their homes?
We have the price cap in this country, which means that customers have been protected from the volatility in global energy prices over recent months. At the moment there is further volatility following the impact on those prices of Russia invading Ukraine, but that is not going to hit the vast majority of households’ energy bills over the coming months. We will have to get to October to see the implications of that. What we have done—as I have just mentioned; I am sorry if the right hon. Gentleman was not listening—is put in place a support package worth £9.1 billion particularly to help those who will find it more challenging to pay their bills.
If the SNP has an argument for not taxing the oil and gas companies, it can have the floor to tell us. I am happy to take an intervention. I am also happy to take an intervention that clarifies what their motion means. Does the line that says “a windfall tax” include the oil and gas companies? Not one SNP Member, including the BEIS spokesperson, will intervene and tell me that that is what it intends. That tells us all we need to know. The SNP is sitting on the fence, hoping that the Government get the wrong idea, and putting out the press release to say that the Government are attacking it.
This is a serious debate affecting some tens of millions of families in the UK, so the sooner he stops wittering on about Irn-Bru and Pets at Home and makes a substantive point, the better for the viewing public.
I make this substantive point. Your motion, which you brought to the House to debate today, says that you are happy to tax Irn-Bru and Pets at Home, but you are not willing to tell me whether you will tax the oil and gas companies. Am I correct? I am correct. Excellent.
As the motion makes clear,
“households will soon be suffering the worst income squeeze since the 1970s”.
The Bank of England has said that inflation could reach more than 7% in April. Households’ average energy bills are forecast to rise by 54%—almost £700 on average—and there is a very real fear that energy costs could rocket again by a comparable amount in October.
Let me put that in context. One in seven people in Scotland are already finding household energy bills unaffordable. That is 640,000 people, and equates to 7 million people across the UK. Whether the cause of these difficulties is simply inflation, the massive hikes in energy costs themselves, low pay or underemployment, the fact that 68% of working-age adults in the UK who are in poverty live in households where at least one adult is in work—the highest figure on record —speaks volumes about the Government’s failure even to understand, let alone take seriously, poverty and what it means in this country. What else could explain their hiking national insurance contributions, removing the universal credit uplift, and allowing energy companies to impose brutal increases on people many of whom were already having to choose between heating and eating? According to the Resolution Foundation, those ill-conceived policies could lead to a fall in real household income of £1,000 per year for working-age households.
Of course, what successive UK Governments have not done simply makes the situation worse. We have all seen—and have just heard about—petrol and diesel approaching £2 per litre, and in some cases it already costs more than that. That is £9 or £10 a gallon, which essentially means that it costs over £100 to fill up an average saloon car tank. That is prohibitively expensive for someone on modest wages who simply wants to fill up the car in order to get to work. Yet every Tory Government I can recall has set their face against a “fuel duty regulator”, which would at least have moderated some of these obscene increases. May I just respond to something that was said by the shadow Secretary of State, the hon. Member for Edinburgh South (Ian Murray)? Let us remind ourselves that Shell alone made £4.7 billion of profit in the final quarter of 2021, and £14 billion in the entire year. So someone is doing very nicely out of these rising costs.
I now wish to turn to a slightly different energy-related matter. Yesterday I received an email from my constituent Elisabeth Walton. She wrote:
“I am writing to you as, being my representative in the House of Commons, I am hoping you will be able to seek an answer for people like me who have been unable to heat their homes as a result of rising prices. I live in an electric-only home, and chose so in an effort to reduce my reliance on fossil fuels.
While I have done everything in my power to reduce the amount I spend on heating (switching from a prepay meter, insulating windows, draught excluders, blankets and hot water bottles), as a single income household with a disabled partner I simply cannot turn on my storage heaters due to the sheer cost.
Could you please explain to me why, with such investment in renewable energy, that my electric standing charge could have more than doubled despite the only price rises affecting oil and gas...
Why is VAT not being cut? Presumably this is one of the actual benefits Brexit could offer us? What is the government doing besides forcing repayable loans onto us?
Why are energy business profits not being controlled to avoid the exploitation of powerless people?
Is there anything I can do to apply pressure to these companies and ease this hardship?
I have gone to my employer to plead for a raise or increased responsibility to meet this increase in living expenses, particularly as I continue to work from home, but this has been flatly denied.”
This is someone who has already done everything she can, and yet is being hammered with energy price rises.
Many of my constituents have written to me expressing the same concerns. Furthermore, the majority are members of single-parent families, particularly women, who have already borne the brunt of austerity and the worst effects of the changes in universal credit. They will not now benefit from the £20 uplift that the Government have removed from so many families who needed it. Does my right hon. Friend agree that more needs to be done to support those families?
My hon. Friend the Member for Lanark and Hamilton East (Angela Crawley) is right that more must be done across the board. So far, women have particularly borne the brunt of the universal credit reduction, and people on modest incomes will bear the brunt of the national insurance increase. Of course, we must take more action across the board.
On the narrow point about the increase in standing charges, what possible reason can there be for energy standing charges doubling other than blatant price gouging and profiteering? The UK Government could act to stop this today if they had the will. This House was prepared to expedite sanctions on Russian oligarchs—in fact, we all said they should have happened already—and, given that we are facing the worst inflation since the 1970s, I am pretty confident this House would be prepared to expedite legislation to outlaw the daylight robbery of people through this obscene profiteering.
I am conscious of time, so I will not take much longer. I am struck by the stark public warnings about the rise in the cost of living. Martin Lewis has said that people were already at risk of “starving or freezing,” and the anti-poverty campaigner Jack Monroe has said that the cost of living crisis will have “fatal” consequences. The Government need to listen not to us or even to high-profile campaigners but to the millions out there who I fear will soon be cold and hungry, and take urgent and immediate steps before this crisis spirals out of control.
(2 years, 11 months ago)
Commons ChamberI am grateful to the hon. Gentleman for that intervention. I agree that it is important that we invest in renewable energy. That is why we on the SNP Benches are fully committed to that. It is only a shame that the official Opposition have such a bizarre fascination with investing in nuclear, but perhaps he will reflect on that.
The current Tory austerity policies do absolutely nothing to relieve the suffering of people who are impacted by the cost of living crisis. In the last year alone, the British Government cut the £20 a week uplift to universal credit. Indeed, they refused to extend the £20 uplift to the 2.5 million disabled people on legacy benefits. That is subject to proceedings in the High Court at the moment. The Government battled against extending free school meals to the poorest children in society. We learned only at the weekend about the allegations that the then Secretary of State for Education, the right hon. Member for South Staffordshire (Gavin Williamson) personally threatened Members of this House who dared to vote for that with the withdrawal of funding from their constituencies. The Government scrapped the triple lock for pensioners who already have one of the worst pensions in the OECD.
All of that is important, because those cuts only deepen and cement the inequalities in our society. They will impact the lives of the poorest people we represent for decades to come. The British Government must reflect on that. When people fall into destitution, it is other parts of the state, almost certainly councils, that have to bear those eye-watering costs. We know that destitution is bad for the economy. It is not good for the economy for people to be unable to afford their weekly food shop or heating bills. Let me be especially clear to the Government that a proliferation of foodbanks is not a sign of the big society; it is a sign of bad policy from people who think that spending £840 on a roll of wallpaper is somehow normal.
My hon. Friend is making a number of excellent points about the damaging nature of UK Tory policy. Does he agree that the benefit cap is one of those problems as well? Is he happy today to put on record the SNP’s support for the Poverty Alliance “Scrap the Cap” campaign?
I am grateful to my hon. Friend for that intervention. Yes, absolutely. The SNP has stood on successive election manifestos with a commitment to scrap the cap: both the benefit cap and the welfare cap. I am only disappointed that the SNP had to lead the charge against the welfare cap in a vote only a couple of weeks ago. Perhaps when people in Scotland are considering who best serves them, whether it is Westminster or the Government they elect in Scotland, they will reflect on that. My hon. Friend makes a very good point.
It is imperative that the Government bring forward solutions to address the cost of living crisis and lift millions of people from experiencing poverty this year, just as we have set out in the motion. The Government must introduce an emergency package to boost household incomes and reverse rising poverty levels across these islands. We want the Chancellor to launch a multi-billion-pound Brexit recovery fund to mitigate the worst, and growing, costs of Brexit.
Those solutions should go hand in hand with other suggestions to tackle rising energy prices. We need a one-off payment to low-income households, which could be identified by way of the council tax reduction mechanism. We must increase and extend the warm homes discount, delivered through customers’ bills and funded by the UK Government. We need the child payment, as seen in Scotland, to be rolled out right across these islands. We need the April benefits uprating to better reflect inflation rates and to reinstate the £20 a week uplift to universal credit which so many of our constituents described as a lifeline.
There is no shortage of suggestions to Ministers for how we can alleviate family income pressures, but there is, I am afraid, a shortage of urgency and energy on the part of a Government distracted by their own internal wrangling. I have a huge amount of respect for the Chief Secretary to the Treasury, but the fact that, on a day when we have another debate about the cost of living increase, the Chancellor of the Exchequer is nowhere to be seen raises a lot of questions about what he is doing.
In contrast to the cruel policies in Westminster, the Scottish National party Government have committed to relieving poverty wherever they have the power to do so. That is why we have doubled the Scottish child payment, rolled out 11 benefits—seven of them brand new—extended free school meals and are working actively to reduce poverty and inequality, and all the while Westminster undermines those efforts. However, the constitutional reality is that, with limited tax-raising powers, no borrowing powers and 85% of welfare spending still controlled in this place, those policies can only go so far when they are continually undermined by Tories and Tory Governments whom Scotland did not elect.
Since being elected four years ago, I have stood in this Chamber warning the Government about the impact of their policies that make life so much harder for my constituents in Garthamlock, Craigend and Easterhouse. When I make those pleas, it is not from a purely dogmatic or ideological point of view. I do so because every Friday morning at my surgeries I meet people who, because of the way life has panned out, rely on the safety net of the social security system, to which we all contribute and which is frankly no longer able to cope. I appreciate that a Tory MP in the home counties probably does not have much care for, or cause to interact with, the Department for Work and Pensions on a daily basis.